The Multiple Scheme Framework Under PFRDA NPS Reforms
PFRDA launched the Multiple Scheme
Framework on 1 October 2025, marked as NPS Diwas, for non-government subscribers only. Instead of holding
one scheme per Tier, subscribers can now hold multiple schemes simultaneously under a single PRAN and the high-risk variant of an MSF scheme can
carry up to 100% equity, well above the 75% cap that applies under standard Active Choice. A follow-up
circular dated 28 August 2026 sorted every MSF scheme into five standardised categories based on equity
allocation making it easier to compare similar schemes across Pension Fund Managers.
- Category A: Highest equity exposure
- Category B: High equity exposure
- Category C: Moderate equity exposure
- Category D: Lower equity exposure
- Category E: Lowest equity exposure
For a full breakdown of how the categories work, see the Multiple Scheme Framework guide.
The December 2025 Exits and Withdrawals Under NPS New Rules
This is the reform with the widest practical impact, since it changed how much of a
subscriber's own money they can access at exit. PFRDA notified the PFRDA (Exits and Withdrawals under NPS)
Amendment Regulations, 2025 in December 2025, and the key confirmed changes are:
- Lump sum raised to 80%: Non-government subscribers can now withdraw up to 80% of their
corpus as a lump sum at normal exit, with only 20% mandatorily going into an annuity, down from the
earlier 60:40 split. This is a PFRDA withdrawal allowance rather than a tax exemption: Section 10(12A)
of the Income Tax Act still exempts only 60% of the corpus, so the portion between 60% and 80% may be
taxable until the tax law is separately amended.
- Full withdrawal threshold raised to ₹8 lakh: A total corpus of ₹8 lakh or less can be
withdrawn in full, with no mandatory annuity at all.
- Partial withdrawals increased to 4: Subscribers can now make up to four partial
withdrawals before age 60, spaced at least four years apart, up from the earlier limit of three.
- Deferment extended to age 85: Both government and non-government subscribers can now
stay invested and defer their lump sum or annuity purchase up to age 85, up from 75.
- Loans against NPS corpus permitted: Subscribers can now pledge their NPS corpus to take
a loan from a regulated financial institution; this facility did not exist before.
- Government sector largely unchanged: The 60% lump sum and 40% annuity structure
continues for both the Central and State Government subscribers.
An earlier proposal under the reform framework suggested allowing partial withdrawals up to
six times a year. But the final amendment notified by PFRDA in December 2025 permits partial withdrawals
upto four times a year. For the complete withdrawal framework including corpus-tiered rules between ₹8 lakh
and ₹12 lakh, see the NPS withdrawal
rules guide.
What Is Still a Proposal Under the Latest NPS Updates?
In May 2026, PFRDA released an exposure draft that proposed a faster four tier grievance
escalation matrix that cut the first level resolution timeline from 30 days to 14 days and replacing NPS
Trust with a dedicated PFRDA Grievance Cell at the second level. As of September 2026, this remains open for
stakeholder consultation and the current 30-day timeline through NPS Trust continues to apply.
Subscribers can use the NPS grievance registration process for complaints under the current framework.
Entry Age Limit Under NPS New Rules
The maximum entry age of 70 years under NPS is not a new change introduced in the 2025
reforms. PFRDA had already increased the entry age limit from 65 to 70 years in 2021 and this limit
continues to remain unchanged. The December 2025 amendment introduced a separate change by extending the
maximum deferment or exit age from 75 to 85 years.
How PFRDA NPS Reforms Affect Subscribers
Together, these changes give non-government NPS subscribers more flexibility at the time of
exit compared with earlier rules.
- A larger lump-sum withdrawal option, more partial withdrawal opportunities and a higher small-corpus
threshold make NPS less restrictive than before. The introduction of a loan facility adds another layer
of flexibility.
- However, the higher 80% withdrawal limit should not be confused with a tax exemption. Under the Income
Tax rules, the tax-free withdrawal limit remains capped at 60% of the corpus.
- These reforms do not apply uniformly across all NPS subscribers. The benefits and applicable rules vary
depending on whether the account follows MSF, Active Choice, Auto Choice or the government sector
framework.
Conclusion
PFRDA's reforms in 2025 and 2026 have brought significant changes to how NPS
subscribers can invest, manage and withdraw their retirement savings. The Multiple Scheme Framework and the
December 2025 withdrawal amendment are already in effect while some other changes are still under;
consideration. As NPS rules continue to evolve, the benefits and options available depend on the subscriber
category and account type. Understanding which rules apply can help subscribers make better informed
investment and also withdrawal decisions.
Speak with a PensionBazaar retirement planning
expert to understand how these reforms affect your own NPS account.
05 Oct 2026 
